The Economic Survey for the year two thousand twenty five to two thousand twenty six notes that negotiations for a trade pact with the United States are likely to be wrapped up within the year, a move that could ease uncertainty on the external front. For India, the Survey explains that global developments pose risks mainly in the form of external uncertainty rather than immediate macroeconomic pressure. It points out that slower growth in major trading partners, trade disruptions caused by tariffs, and fluctuations in capital flows may at times affect exports and investor confidence.

At the same time, the Survey highlights that progress in talks with the United States could help stabilise the external environment once concluded. India and the United States have been discussing a bilateral trade agreement since March last year, with six rounds of talks completed so far. Progress has been gradual, largely due to the United States imposing steep tariffs on Indian goods starting August last year.

In December two thousand twenty five, a delegation from the Office of the United States Trade Representative, led by Deputy Trade Representative Ambassador Rick Switzer, visited India for discussions. This marked the second visit by US officials since higher tariffs and additional penalties were imposed on Indian exports following concerns related to India’s purchase of Russian crude oil.